There has been a very positive response this week to The Pension Regulator’s (TPR) achievement of finalising a deal with Sir Philip Green over the BHS pension shortfall after a long period of unease for the store groups staff.
The TPR secured a payment of £363 million from the former owner on the 28th of February which will be used to help set up a new independent pension fund for the former employee’s. In some respects this is a victory for the staff who originally had the prospect of having to go to the “Pension Lifeboat” fund (The Pension Protection Fund) which would have meant a far lower benefit for their pension pay out and although the new fund will ensure they receive at least the level of accrued rights they would have had before the companies collapse in April 2016, it will in no way reach the figures they would have received should the company not have gone in to insolvency and the original Defined Benefits scheme remained intact.
TPR’s view was this was the best possible result after weighing up other options as any further legal challenge would have seriously prolonged the process and had a major cost and therefore reduction in the possible amount won. It also ensure there could be no further uncertainty around the employee’s expectations.
It also sent a strong message to other large employers about the TPR’s powers around pension issues and underfunding which was well received by the government.
